Extension Watch, Part One: Joey Votto

This is a new series I am introducing to the blog, because extensions are often some of the better contracts that teams can sign.  Without the impact of the open market, the leverage a player holds over an organization is reduced, which often leads to some more neutral (or even team-favorable) deals being signed.  The kinds of players that get extensions are usually between the ages of 25-27, so that an agreement can be reached prior to when the player hits his prime and the open market.  On occasion, there will be players who are younger or older that will be given extensions based on the team that is handing the extension out.  Some recent examples of extensions include: Matt Moore with the Rays (2011) at a very young age, Alex Rodriguez with the Yankees (2007) at the age of 32, and Matt Kemp with the Dodgers (2011) at 27.  So, for this series, I won't just include players that are up for extensions in the typical window.  I'll look at players who I would consider giving an extension regardless of the age of the player.  With that being said, let's look at extension candidate number one: Joseph Daniel Votto.
 

In an old log cabin in the Canadian wilderness in 1983, Joey Votto was born...errrrr, okay, he's from Toronto. Anyway, Votto is from Canada, he's 28, and he's one of the best players in baseball (fair to say he's the best LH hitter in baseball?  Yeah, probably).  Since we are considering extensions, we want to know a couple things:
 
1) How much will the player produce in the future?
2) How much money should the player be extended for, and for how long should the player be extended?
3) How much room does the team in question have to sign the player?
4) What appealing options will the player have if he hits the open market instead of signing an extension?  Where can he go?
 
An analysis of these facts should give us a good idea of the player's future worth and where he will likely end up signing.  With all of that, let's go back and look at each of the questions (because I can, I'm breaking them into sections):
 
Section One: Future Value
 
There are a few things we can look at to get a solid idea of how well an individual will perform in the future: his very recent levels of success, his current skill set, and his age in relation to a typical age curve.  Well, when it comes to recent success, not a whole lot of guys have been better than Votto.  To try to account for any potential outliers, but to (at the same time) put more emphasis on recent success, I am going to be using two year splits for every extension candidate.  Without further ado, here's what Votto's done for the Reds in the past two seasons:
 
1367 PA/ .316 BA/ .420 OBP/ .564 SLG (163 OPS+)/ 12.4 WAR (0.0 dWAR)
 
One of the biggest things to look at here is that Votto isn't missing much playing time at all.  684 PA per season with an average of 156 games per year.  Staying healthy does one thing: it allows the player to gather more value and not miss opportunities to produce.  He's getting a lot of hits, but he's also getting a lot of walks, and he's certainly producing tons of power (.248 ISO in that time span along with a 17.4 AB/HR rate, which is really good).  He's shown recently that he can produce, so what about his skillset going forward?  Well, to look at this, I'll consider a timeline of a few select rates and how they should impact his progression:
 
2009: 12.9% BB/ 19.5% K/ .245 ISO/ .372 BABIP/ 17.5% HR/FB/ 10.8% SwStr%
2010: 14.0% BB/ 19.3% K/ .276 ISO/ .361 BABIP/ 25.0% HR/FB/ 10.4% SwStr%
2011: 15.3% BB/ 17.9% K/ .222 ISO/ .349 BABIP/ 18.2% HR/FB/ 8.7% SwStr%
 
There are a lot of positive signs here, and really not that much that is negative.  Right away, it is apparent that Votto's got some pretty elite plate discipline.  He walks a ton (nearly 14% of the time on average), and he doesn't swing and miss a lot.  When you do this, it means you are likely swinging at balls in the zone a lot and are making contact with them.  This is reflected in his constantly high BABIP and his strong batting average.  Taking walks is great, but using that plate discipline to increase contact ability is what takes great players and makes them elite.  The other strong thing is just that: Votto's strength.  If you've watched him play, his home run finish is incredible, and he's got as much power as any hitter in the game.  Constantly high ISO and strong HR/FB ratios back this up.  Knowing Votto's offensive skill set, he can handle being negative in value on defense.  He's not a great defender, but he's also not awful.  He was completely at replacement level over the last two years.  This helps his future value a lot, especially since he's only going to be 28 years old on Opening Day in 2012.  This means he's got at least three more great seasons in him, with a slow decline following that (if he avoids major injuries).  That leads us to section two: his future worth.
 
Section Two: Structure of a Possible Extension
 
The dollars/WAR ratio is generally only applicable to free agent extensions.  Knowing that, I looked at the history of extensions this summer and found a reasonable figure for a team of around 3.5 million dollars per win in a neutral team extension.  A player can, for example, produce 4 wins in an extension and a neutral contract would suggest that he be worth roughly 14 million dollars.  However, since so many extensions lately have been signed by younger guys, I think a figure closer to 4.0 is much more reasonable as a base right now for someone of Votto's age and position in relation to when he'll be a free agent (the 2014 off season).
 
Given the previously mentioned past success and current skill set, it makes a lot of sense to sign Joey Votto to a longer contract with a high AAV.  The value that Votto produces is more likely to be worth that kind of deal than another extension candidate.  Going by WAR, these are the numbers that Votto has been putting up in each of the past few years:
 
24 yo: 3.0 WAR
25 yo: 4.2 WAR
26 yo: 5.9 WAR
27 yo: 6.5 WAR
 
Accounting for seemingly random shifts in defensive value and that last year was a surprisingly down year from an end-result standpoint from Votto, it is still safe to say that Votto has been experiencing some pretty steady progression and is following a bell curve rather nicely.  I think that, since Votto has so much plate discipline and so much power, a nice plateau of three years at around 6.8 WAR is completely justifiable, and a steady defensive decline with slight decreases in offense will follow suit.  Here's what I think Votto produces from a WAR standpoint over the next ten years:
 
2012: 6.8 WAR
2013: 7.0 WAR
2013: 6.7 WAR
2014: 6.2 WAR
2016: 5.7 WAR
2017: 5.1 WAR
2018: 4.4 WAR
2019: 3.6 WAR
2020: 3.1 WAR
2021: 2.0 WAR
 
That's a grand total of 50.6 wins of value over the next ten years.  However, given the trends in the values portrayed on the timeline, a good cutoff comes after the 2019 season, with the ideal cutoff being the 2018 season.  This means that, if you count the remaining two years on Votto's contract, an ideal extension signs Votto for 7 years (with plans being made to replace him occurring behind the scenes while he's still producing 5+ wins in value).  Since Albert Pujols got 10 years and Prince Fielder is seeking 8+ , this number is reasonable, considering those numbers are free market figures and Votto is signing an extension.
 

So let's go with a 7 year deal, which has Votto as producing 40.9 wins in value.  For extensions, I do not anticipate d/WAR figures inflating as quickly as on the open market, so let's assume the following progression for those numbers over the 7 years of the extension:
 

2012: 4.0 d/WAR
2013: 4.3 d/WAR
2013: 4.6 d/WAR
2014: 4.9 d/WAR
2016: 5.2 d/WAR
2017: 5.2 d/WAR
2018: 5.2 d/WAR
 
Averaging these figures gives us a 4.77 d/WAR value on average over the course of the contract.  As has been said in previous entries on the blog, it is very tough to forecast the future actions of the economy and the baseball marketplace, so I plateaued the figure at 5.2 for 2016-2018.  With all of this being said, if Votto produces the value projected over the d/WAR climate projected, he will produce roughly 195 million dollars worth of value over the next 7 years.  If those numbers sound relatively familiar, it's about what Scott Boras is apparently looking for on the open market for Prince Fielder (since Fielder is an inferior playerthis makes sense due to the fact that Votto won't be on the open market).
 
So here we are, left with a contract that looks something like this:
 
7 years/ $195 million, and I'm going to be safe an assume a full NTC is a part of that extension
 
Section Three: Ability for the Reds to Extend Him
 
Let's face reality here: there are not very many teams that can afford an average annual salary of 28 million dollars.  In 2011, the Cincinnati Reds carried a payroll of 76 million dollars.  Votto made up only 7.4 million of that.  That means a payroll bump of 21 million dollars in 2012 would be due, raising the payroll to 97 million.  Votto's contract would make up 28.8% of the payroll in 2012!  This happens without extensions being given to other players that will need them in the near future such as Mat Latos, Brandon Phillips, Sean Marshall, Johnny Cueto, and even guys further down the road like Drew Stubbs, Devin Mesoraco, and Jay Bruce.  Simply said, if Votto signs a deal that is anywhere close to fair value for an extension, teh Reds will be crippling themselves financially.  They'll be "stuck" with a guy producing tons of value, but they won't have money to add necessary free agent pieces when it matters down the road.  With that being said, it's time to move on to section four and see what other options Votto might find more attractive and fair to his future value.
 
Section Four: Feasibility of Other Options
 
In the ideal world, Prince Fielder has already signed a deal and the marketplace for Votto after the 2013 season is a lot easier to forecast.  However, assuming no other big 1B are signed by the following teams, here's a list of teams that could be in play for Votto on the FA market when he hits it:
 

1) Toronto Blue Jays- What better place for Votto to go than back home?  Unless the Jays stupidly extend Adam Lind and want him to play 1B, the spot is going to be wide open for business in the off season following 2013.  The Jays have bigtime ownership, and they haven't yet spent a lot of money, but have said that they will do so when the time is right.  I don't believe the time will be more right than when Votto is ready to hit the free agent market.  It is, for all intents and purposes, the perfect match.  Votto can more to DH in the later years of his contract, so the Jays may be more willing in the future to go well beyond that 7 year ideal contract.
 
2) Texas Rangers- The Rangers are a very hard team to predict here, since they have so many guys that could potentially be on the move.  Josh Hamilton, Nelson Cruz, and Ian Kinsler have completely unknown future statuses with the team, so I'm going to assume that the Rangers will have the financial flexibility to bring on Votto to play 1B.  The Rangers are showing no sign of slowing down, and they don't have to compete with the Yankees, Red Sox, or Rays, so they may be the team that is in the best position to win by opening day of 2014.
 
3) Chicago Cubs- If the Cubs do not sign Prince Fielder, that likely means that they went with cheap options at first base to serve as stopgaps during the rebuilding process.  Opening day 2014 gives the Cubs' management two full seasons and off seasons of time to rebuild the team and get in a position to win.  Votto may be a guy that the Cubs look at to put them over the top.
 
4) Seattle Mariners- Much like the Cubs, the Mariners are in a rebuilding time.  Unlike the Cubs, they have a bunch of studly young pitchers that should be absolutely fantastic by 2014.  The Mariners will have the pitching staff to win a championship if everything works out, and they'll need the offense behind it to make it work.  With bad contracts coming off the books, the Mariners should have the financial ability to sign Votto, even if they don't have the same flexibility now.
 
5) Los Angeles Dodgers- the Dodgers are a weird team to forecast, because they are undergoing an ownership change.  Assuming everything goes well and the team gets a large TV deal like they should be able to get, they should be in a position to spend in a couple of years.  They'll likely be loaded with extensions for Kemp, Kershaw, and Billingsly at the time, but adding another star should be in the realm of possibility.
 
Teams with an outside shot: St. Louis Cardinals, Miami Marlins, Chicago White Sox, Minnesota Twins, Baltimore Orioles
 
So, knowing all this, it is completely unrealistic to assume that Joey Votto is an extension candidate unless he is traded within the next 15 months.  Since the Reds appear to be trying to "win now", it is more likely that they don't trade him much before July 31st, 2013.  This means that Votto will likely be a trade deadline move (and a major one at that), or that he'll hit the open market in the same way that Prince Fielder and Albert Pujols did this year.